Bill Thomas Signals Willingness To Undercut White House On Social Security To Save GOP

by Steve

The first major crack in the dam on Social Security came yesterday not from the Democratic side, but from the GOP, and from a significant source. House Ways and Means Committee chairman Bill Thomas signaled that Bush’s privatization plan could already be “a dead horse” because of the partisan warfare it has already engendered, and indicated that he and others would begin seeking alternatives that think outside the box. His comments caught the White House by surprise, but probably reflect Thomas’s assessment that the Democrats are prepared to use privatization as a major weapon in next year’s midterms.

Good guess Bill. We’re going to ram Bush’s plan down your throats. And Labor will be along for the ride, pointing out how much the securities industry stands to make from privatization, in another element of the campaign against Bush’s plan.

Thomas, one of Capitol Hill's most powerful figures on tax policy, is the highest-ranking House Republican official to cast doubt on the president's plan for creating individual investment accounts. He said that as an alternative, he will consider changes such as replacing the payroll tax as Social Security's financing mechanism and adding a savings plan for long-term or chronic care as "an augmentation to Social Security payments."

Thomas's comments, which took the White House by surprise, reflected some Republicans' view that the White House has mishandled the plan's rollout and that a fresh start is needed to allow a chance for getting Democratic support.

Speaking two days before Bush's second inauguration, Thomas said Bush's plan as it has been described "cannot, given the politics of the House and the Senate," win passage in both chambers.

"Every breath that's spent on discussing that plan is an attempt to lay a political ground war for the next election," Thomas said. "Save those breaths. Talk about what we need to do now that the president's plan is on the table so that we can address, in a legislative way, a solution on a bill the president could sign. That would be, I think, a positive gesture. And I'm looking forward to those discussions and not a continual beating of what will soon be a dead horse of their proposal."

The chairman's staff said the "dead horse" comment was a reference to Thomas's expectation that Democrats would continue to harp on what they view as politically damaging elements of the plan even if they have been modified.

Gene B. Sperling, who chaired the National Economic Council in the Clinton White House and participated in the panel with Thomas, said the chairman's comments pointed the way to a possible compromise that would include many Democrats.

Thomas is also bringing up other issues with Social Security that need to be addressed, such as gender-adjusting Social Security to reflect the fact that women live longer than men. But where Thomas will make things difficult for the White House is in his call to address tax changes as part of the Social Security solution. Bush had hoped to hold off pushing his tax changes until he could use them as a political club in next year’s midterms. Thomas in effect is trashing Rove’s whole political strategy by saying the two issues should be dealt with now and not used as clubs in partisan warfare.

It should also be remembered that Thomas was not at all happy with being misled by the White House last year on the true costs of the Medicare drug benefit.

It remains to be seen how the White House will react to their own Ways and Means Committee chairman undercutting the president’s agenda. But Thomas has managed to signal that there are members of the GOP who are interested in improving Social Security without gutting it through the redirection of contributions towards a benefits-reducing personal accounts option, and that is something Democrats should consider seriously.

And don't think for a moment that Thomas's action yesterday had nothing to do with calculating the likely damage to the GOP next year of blindly following Bush's gambit into a midterm election buzzsaw.